UN Board of Auditors recommendations Status Actions taken or intended to be taken and/or recent update + Estimated time for completion Main Recommendations 09(a) Continue to implement a strict Staff In Between Assignments policy, with a view to provide every staff member with a full-time assignment in order to limit the cost for the organization (para. 14) DHRM 09 (b) Improve its treasury risk management; prepare guidelines in respect of its centralized pooling policy; and implement better segregation of duties in banking operations (para. 35). Treasury Section 09 (c) Take comprehensive steps to manage its foreign exchange risk exposure (para. 40) Treasury Section 09 (d) Incorporate into its contributions tracking system an indicator to assess the time-lag between the due date and payment of contributions, and formalize the payment due dates of pledged contribution into contractual agreements (para. 42) DER / DRRM (further update is expected by 2 nd half of 2008) (TMS) (Centralization during 2008) (during 2008) The number of SIBAs as of 1 September 2007 was 156 compared to 194 before the March 2007 Appointments, Postings and Promotions Board (APPB) session. This represents a reduction of 20 %. The majority is working in temporary assignments in various field locations. The Office has taken a number of measures to deal with the issue, including proactive counselling of staff, introduction of stricter measures on number of permissible compendia, and a voluntary separation programme. The Office is also strengthening the Career Planning Unit in the Recruitment and Postings Section of the Division of Human Resources Management (DHRM), which is tasked with providing structured advice, counselling, guidance and support to staff members on career advancement, possibilities for posting and career development opportunities within and outside the organization. As part of UNHCR's Structural and Management Change process, measures are also under way to address the SIBA issue through a comprehensive review of UNHCR's workforce management. The aim of the process, which UNHCR launched in February 2006, is to improve UNHCR's responsiveness to the needs of its beneficiaries by channelling more of its resources into operations, reducing expenditures on administration and Headquarters costs, and locating staff and services where they are most effective. This involves reviewing and realigning structures, processes and workforce, with a view to maximizing flexibility, effectiveness and overall performance. A definitive resolution of the problems of SIBAs amongst UNHCR's international professional workforce thus requires a comprehensive staffing exercise which can be undertaken only when the results of the reform are fully known and the organization's staffing needs fully defined. Once work on the streamlining of Headquarters and Field operations has been completed in the first quarter of 2008, UNHCR plans to undertake an exercise to align the number of international professional staff with the number of posts required to meet the needs of the organization, thus eliminating the SIBA problem. Notwithstanding the above there will be, at any given time, a number of staff who have completed a standard length of assignment (SAL) in one duty station and are being considered for appointment to another, in accordance with UNHCR's policy on the equitable rotation of staff between duty stations. The of the Treasury Management System (TMS), progressively from late 2007, in conjunction with the adoption of centralized cash pooling, will significantly facilitate risk management. The segregation of duties in banking operations from the front office in Treasury to the back office in Finance will be anchored in roles and responsibilities within PeopleSoft and TMS systems. While TMS was implemented on 12 November 2007, the of global Centralization will be staged by region throughout 2008. The Treasury Management System s (TMS) functionality will permit more effective mitigation of the foreign exchange risk derived from both balance sheet and income and expenditure exposures, through global systemenabled cash flow forecasting and positioning. UNHCR s contributions are voluntary and are negotiated accordingly. Pledges pending payment are regularly monitored through PeopleSoft reports. Draw-down schedules exist for some major donor Governments. The draw-down on pledges is advanced whenever possible, and regularly reviewed. UNHCR is continuing to promote donor commitment to specific payment dates for pledged contributions within contractual agreements, in order to improve the predictability in timing of the receipt of pledged contributions and to encourage the early payment of pledges. 21/02/2008 1
09(e) Update periodically the status of the bank accounts (para. 44) Finance Section 09 (f) Improve the effectiveness of the communication between the Finance Department and the Treasury Section with regard to the closing of field office bank accounts (para. 46) Treasury Section 09 (g) Fully reconcile all bank accounts in a timely manner (para. 51) Finance Section 09 (h) Introduce controls to avoid negative balances on petty cash accounts (para. 54) Finance Section 09 (i) Continue to accelerate the pace of submission of Sub- Project Monitoring Reports (para. 57) Finance Section 09 (j) UNHCR should a) significantly increase the proportion of audit certificates received in respect of implementing partners expenditure; (b) shorten the deadline for the submission if audit certificates and continue to improve its statistical monitoring of audit certificates; and (c) determine overall impact on its financial position of qualified audit certificates and reflect this impact in its financial statements as needed (para. 60) Controller s Office & Finance Section 09 (k) Take all necessary steps to secure reasonable assurance on the reported use of funds by implementing partners prior to the final audit of its financial statements and (b) to disclose any relevant concerns regarding this usage in the notes to the financial statements (para. 62) Controller s Office & Finance Section 09 (l) Strengthen the monitoring of sub-projects and ensure that adequate records are maintained for all project assets (para. 75); Africa Bureau (TMS Nov.07) UNHCR agrees with the Board s recommendation and action will be taken accordingly UNHCR agrees with this recommendation. The integrated tasks and duties derived from banking operations between Treasury and Finance will be segregated through the allocation of system-based roles and responsibilities within the MSRP Treasury Management and Finance systems. UNHCR agrees with this recommendation. With automated on-line reconciliation available to all offices by the end of 2007, UNHCR is better equipped to ensure timely and accurate bank account reconciliation. In 2007, UNHCR is monitoring field offices timely compliance on a monthly basis and following up any instances of noncompliance with direct instructions to Representatives. UNHCR agrees with the Board s recommendation and has reinforced procedures for monthly monitoring of petty cash balances during 2007. Negative balances are flagged during monthly closure of accounts and appropriate corrective actions are taken accordingly. UNHCR will continue to actively monitor the recording of Implementing Partner (IP) Monitoring Reports and the associated uploading of SPMR-related accounting transactions in the MSRP. However, taking into account the challenging operational environment of UNHCR s activities, the Office considers that up to 98 per cent compliance by June of the following year is an acceptable status which has been consistently achieved in recent years through a sustained effort by the organization. UNHCR agrees with statements (a) and (c) above. The organization has significantly improved its reporting tools for monitoring IP audit certification compliance as elaborated in the response to recommendation 9 (k) below (para.62). However, UNHCR wishes to underline that the adoption of IP audit certification is not a short-term process. It is a mid- to longer-term goal with formidable challenges. UNHCR field operations are often located in remote areas around the world and the availability of qualified auditors and fully competent audit firms can present a constraint. Notwithstanding these difficulties, UNHCR holds itself to high standards of verification requiring IP audit certification for sub-agreements above certain budget values, and remains committed to this challenge. With regard to statement (b) above, UNHCR has already shortened the deadline for the submission of implementing partner audit certification and is of the view that further reduction is not feasible. UNHCR considers that its Sub-Project Monitoring Reports (SPMRs) constitute the fundamental internal management tool and process for the verification of the use of funds by implementing partners. Implementing partner audit certification is seen as a complementary tool to further examine the appropriateness of the use of funds, and as a further independent basis for the identification of deficiencies that may require closer monitoring or remedial follow-up, and which might otherwise fall beyond the reach of the OIOS audit plan. While independent audit validation of implementing partner records, activities and SPMRs is of important concern to UNHCR, the Office does not consider that the specific issue of the limited recording of independent audit reports for projects at the time of the Board of Auditors review hampers the Office s ability to obtain an accurate picture of the situation and proper use of funds by implementing partners. The absence of data in the system, while inconvenient from a management perspective, does not mean that the monitoring is not performed. The verification exercise scheduled in October/November 2007, could not be conducted. The Office has been inundated with a new wave of emergency of new arriving Congolese refugees as a result of the situation in the Kivus. The asset verification is now rescheduled to take place in February 2008. Update of Jan.08 21/02/2008 2
9 (m) Review its process to ensure the validity of unliquidated obligations (para. 79); Finance Section 9 (n) Complete the data clean-up exercise of the asset database started in 2005 (para. 83); 9 (o) Periodically reconcile the amount of the purchases recorded in the accounts and those entered into the database (para. 85); 9 (p) Pursue its efforts to perform timely annual physical inventories (para. 89); 9 (q) Update the assets database and report the decisions made by local asset management boards in a timely manner (para. 94); 9 (r) Reduce the time between changes in country assessment and their approval (para. 130); ESS/DOS (June 2008) UNHCR agrees with this recommendation and will, as necessary, strengthen procedures that will more closely scrutinize the systematic validation of unliquidated obligations (ULOs). In particular, ULO balances in Commitment Control are reviewed in conjunction with all subsequent liquidations. In 2007 the clean up exercise continued with another sale of old/obsolete assets (sales proceeds amounted to US Dollar 2.5 million by October 07), write-off of damaged and missing assets in addition to the transfer of assets to implementing partners as a result of phasing down operations. The exercise will continue during 2008 for operations where MSRP roll out has been accomplished late in the year 2007. UNHCR will continue, during 2008, the review of all disposal requests in the asset track database back to the year 2000, including local LAMB/HAMB decision on recovery of funds. The follow up will also continue to further reduce the assets in transit. UNHCR sends the up-dates on procurement to field operations on a quarterly basis. In addition UNHCR conducted a follow up on assets procured but not recorded in the system. Results revealed a technical problem in MSRP, which was rectified in December 2007. New instructions were sent to field operations as part of the continuous follow up process during 2008. UNHCR confirms that efforts continue to ensure maximum compliance with the physical verification exercise. 66% of field operations have reported completion of the exercise during 2007. However, it will be unavoidable to have less compliance by large emergency operations where volatile security situations prevail. The exercise is an ongoing process which will continue to be closely monitored. Further instructions will be issued to enhance the process of physical verification in the field during 2008. The physical verification of HQ assets for 2007 was conducted in December. UNHCR has conducted a review of all disposal requests prepared in PeopleSoft including the Local and Headquarters Asset Management Boards LAMB/HAMB authority and the timeliness of of decisions etc. As a result of the exercise revealed that 83 % of the decisions made during the years 2004 to 2006 were implemented and cases were closed. A second round of quality control started in November 2007and will continue during 2008. A regular feed back is given to LAMBs in the field and fair discussion of the cases is conducted. In Jan. 2008, a standard format for LAMB minutes was sent to the field with a recommendation to use it in future. In 2007, 93 LAMBs were created. The remaining countries are lacking sufficient staff to form a LAMB and therefore submit their cases directly to the HAMB. A close follow up has been done on LAMB cases and minutes, and the collected information is available in Livelink. Further enhancement to the system is required in order to obtain information about agreements of transfer of ownership to implementing partners. UNHCR started the Crisis Scanning Mechanism in December 2007. At present the process is in the phase of testing to fully respond to the needs of UNHCR. UNHCR will share the mechanism more widely, once proofed to be useful and serving the purpose. The action alert system will remain while the automatic emails reminding desks to input information have been discontinued. 21/02/2008 3
9 (s) Bring its stock in line with its target level of 500,000 refugees (para. 134; SMS 9 (t) Improve the accuracy of its demographic estimates and test them for reasonableness (para. 142; Africa Bureau & DIPS 9 (u) In consultation with the United Nations ethics office, request the Chief Executives Board for Coordination to address the gap in current conflict of interest policies (para. 149). LAS / DHRM OTHER RECOMMENDATIONS 66 UNHCR agreed with the Board s recommendation that it integrate all the sub-projects into the MSRP database as quickly as possible. Finance Section 68 UNHCR agreed with the Board s recommendation that it determine and address the causes of discrepancies between MSRP and Livelink. Finance Section 72 The Board recommends that UNHCR review the expenditure channelled to the Uganda Office of the Prime Minister to determine whether it strictly complies with its mandate and legislative authority. Africa Bureau The Central Emergency Stockpile in Dubai and Copenhagen as at the end of 2007 contained the required quantities of NFIs (Non-Food Items) either in stock or in the shipment pipeline, to respond to an estimated number of 500,000 beneficiaries. For many items stocks were above the target number to allow for a cushion to manage the time lag when items are released and before they are replenished. UNHCR considers that this recommendation has been fully complied with. The verification exercise in Nakivale and Oruchinga, Mbarara was planned in November 2007. UNHCR undertook preparatory activities including purchase of equipment (computers, printers and other accessories), mobilization of staff, site preparations, and coordination with stakeholders. However, the timing coincided with the Congolese refugee influx and the Office had to postpone the exercise for two major reasons: (1) Priority response to the emergency meant that staffing and other resources were redirected to Kisoro. The registration team that was put in place was deployed to do level one registration of newly arriving refugees. (2) Nakivale was designated as the area where refugees from the border in Kisoro were to be moved. The exercise is postponed to 18 February 2008. Update of Jan.08 UNHCR provided a background paper on Conflict of interest related to family ties between UNHCR staff members/implementing Partner Staff to the United Nations Ethics Office on 14 January 2008. UNHCR believes that there are sufficient rules within the UN Staff Rules & Regulations and UNHCR s Code of Conduct to address conflict of interest situations. UNHCR is seeking endorsement from the Ethics Office on UNHCR s view. Furthermore, UNHCR is seeking the Ethics Office s views on the BoA suggestion to request the Chief Executives Board for Coordination to address the gap in the current conflict of interest policies. The Ethics Office acknowledged receipt of the background paper on 17 January 2008, and has indicated that they will respond to UNHCR in due course. Action has being taken to update MSRP records for implementing partner sub-projects up to 2006. The responsibility for adding IP Agreements in MSRP is passed to field offices with the MSRP roll-out up to end 2007. Where MSRP was rolled out to field offices in late 2007, further actions among Finance, Bureaux and field offices will be required to ensure that all data for 2007 IP Agreements in the MSRP records is complete. Update Feb.08 UNHCR recognizes that discrepancies exist between the two systems. As Livelink is a flat PDF file system and MSRP/PS is an online real-time data generator the means of replicating more accurate and complete data transfer between MSRP and Livelink will be further assessed during 2008 subject to availability of adequate resources within agreed priorities. A series of training programmes were conducted for all UNHCR implementing partners in Uganda, including those staff from the Office of the Prime Minister. The training agenda included protection of refugees and IDPs and programme management. The training programmes took place in Kampala, Hoima, Arua, Moyo and Lira. Africa Bureau update of Jan.08 21/02/2008 4
87 UNHCR agreed with the Board s recommendation that it reconcile the data from the physical inventory with the data from both databases so that the analysis, reconciliation and update can be reflected in the note to the financial statements of the year to which the inventory refers. 92 The Board recommends that UNHCR review its asset management processes to ensure that items disposed of or stolen be written off in a timely fashion. 96 UNHCR agreed with the Board s recommendation that it shorten the time period for formal write-off approvals. 98 UNHCR agreed with the Board s recommendation that it record accrued interest not yet due in the appropriate account at the end of each year. Finance Section 101 UNHCR agreed with the Board s recommendation to comply with its cash management policy with regard to ceilings of assets held in a single bank. Treasury Section 106 UNHCR agreed with the Board s recommendation to prepare briefing kits in a harmonized and improved format that comply with the guidelines. Executive Office 108 The Board recommend that UNHCR establish written procedures for the recruitment of the DHC and AHCs. Executive Office 110 The Board recommends that HCR fulfil the PARs of all staff members of the Executive Office. Executive Office 115 The Board recommends that UNHCR fill vacant posts in a timely way and shorten recruitment procedures. DHRM (TMS Nov.07) (June 2008) (Clarified) As of January 2008, all assets data will be compiled in one system, that is the MSRP/People Soft (procurement, payments, disposal etc.). This will ensure more accurate information for the required reconciliation as of the year 2008. UNHCR has exerted serious efforts in addressing the issue of assets disposal and timely writ off procedures by constantly reviewing the field operations requests for disposal and follow up on their LAMBs decisions accordingly. (Please refer to response to recommendation 9(a) of this matrix). UNHCR agrees with the recommendation and will improve the time period for obtaining the formal write-off approvals. UNHCR agrees and will implement this recommendation. UNHCR agrees and will comply with this recommendation. The Executive Office has shared the relevant instructions and guidelines on the proper form, preparation of briefing kits and talking/speaking points for the High Commissioner with all the relevant Bureaux and Divisions ahead of the HC's missions and/or meetings. These are also shared upon individual request. These recruitments were done in accordance with past practice and on a competitive basis. The DHC and AHCs were appointed on the basis of shortlists and well-publicized application processes, respectively, followed in each case by thorough screenings and panel interviews. The SG's Chef de Cabinet confirmed to UNHCR's Chef de Cabinet that the current recruitment process that UNHCR is carrying out for these senior positions should continue to be applied. There are no written rules that state otherwise, and that the SG has no intentions to institute any changes. UNHCR has yet to revise the relevant section of the UNHCR Manual to reflect the above input and is intended to so during the first half of 2008. UNHCR has checked with the SG office in NY and has received the confirmation from the Secretary-General's Chef de Cabinet that the DHC and AHCs have to have their PARs (Performance Appraisal Reports) completed by the HC and that the HC will have to do an equivalent evaluation with the SG, this procedures will now be initiated accordingly. UNHCR is working on the enhancement of the Fast Track Procedures. The aim of the enhanced fast track model is to fill positions in emergency operations within 2 months from advertisement. 21/02/2008 5
120 UNHCR agreed with the Board s recommendation that it review the validity of all external standby agreements for emergency responses and update its stocktaking and catalogue of emergency response resources accordingly. ESS/DOS 122 The Board recommends that UNHCR assess the efficiency and effectiveness of emergency deployment procedures. ESS/DOS 126 The Board recommends that UNHCR clarify the issue of project personnel arrangements and ensure compliance with the 2004 Executive Board instruction on the discontinuation of such arrangements. PBS / DFAM 132 The Board recommends that UNHCR implement a monitoring tool on the quality and quantity of items stocked in Dubai. SMS/DOS 138 The Board recommends that UNHCR ensure full compliance with MOSS/MORSS regulations, especially for duty stations in phase III. FSSS/DOS (March 2008) A guide to UNHCR's Emergency stand-by partners and deployment arrangements has been finalized and will be issued and shared with all staff during the month of February 2008. UNHCR has reviewed all existing stand-by agreements and is in the process of drafting additional ones with new partners. UNHCR consistently reviews emergency deployments in the different regions, and has just finalized one with the Europe Bureau. The plan is to continue the process with other Bureaux using real and evolving situations and to produce the relevant procedures during the first half of 2008. As for the deployment procedures of staff (ERTs and stand-by partner staff) UNHCR is confident that the Guide to Emergency Standby Partners and External Deployment Arrangements will help to streamline emergency deployments. UNHCR has finalized a Guide to Emergency Standby Partners and External Deployment Arrangements. The guide was distributed to Field Operations, to HQs Services and is now available on the UNHCR s Intranet. UNHCR has also finalized the UNOPS Field Guide which was shared with UNOPS Geneva for comments and clearance before issuance. UNHCR has already produced reports on quantity of stocks which is called stock report in addition to other reports regarding the quality of stocks exist in the warehouse. UNHCR different Services worked closely together to provide the required assistance and funding to ensure that all offices meet the HC s deadline of December 2007, for MOSS compliance of all offices in security phase III and above. By January 2008, there were 20 offices (12 in phase 3 and above) who had not yet achieved MOSS compliance, primarily due to changes in country MOSS tables or new office creations. All offices are scheduled to be completed no later than March 2008. 21/02/2008 6